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by Mike Caswell

A Boston judge has dealt a legal setback to a group of Canadians charged by the U.S. Securities and Exchange Commission for a scheme involving the illegal sale of as much as $1-billion worth of shares in several U.S. listings. (All figures are in U.S. dollars.) The group had been seeking to have the charges dismissed, arguing that the SEC brought the charges too late. The judge, however, has ruled that the case can proceed.

The ruling comes as part of a case that the SEC has been pursuing against a group associated with West Vancouver's Frederick Sharp. The SEC claims that the group facilitated multiple pump-and-dumps, allowing insiders of public companies to secretly sell shares through an offshore network. The group concealed share positions and ran a clandestine communications network to co-ordinate their activity, according to the SEC.

With the matter yet to go to a trial, six of the defendants challenged the case. Their complaints were largely technical in nature. They said that the SEC charged them too late, relying on pump-and-dumps that occurred before the five-year deadline for bringing the case. The SEC filed the charges on Aug. 5, 2021, which means that anything prior to Aug. 5, 2016, could not form part of the case, they contended. (The SEC referred to events as far back as 2011.)

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